Invention Submission Firms, Design Firms, and Patent Lawyers – Are They All a Rip-Off?

Watch most Inventor shows on TV and you will likely see people on the edge of disaster financially. You hear story after story of people that took out a second mortgage on their house, used every bit of savings they had, were living in their car and on the brink of bankruptcy. These were the ones that made it on camera. They had thousands of entrants and only a few made it as far as being televised. Just think if even Â¼ of the people who auditioned and didn’t get on T.V spent as much money as the ones you saw. The other thing you need to consider is that all of those that did not get on T.V. were looking for someone to produce their idea and get it to market.

There are a number of invention submission companies out there and now there are even more that have sprung up offering help, for a price and feeding off of everyone’s enthusiasm to make it rich. Unfortunately, not all of them have your best interest at heart. Some of them are only out to empty your bank account and really don’t care if your item gets to market as long as your check clears the bank. You have to understand no matter who you pick to use, they provide a service and that for every service you use you will have to pay a price.

If you come to them and say I have idea X and I want to have a patent search done, I want to file for a patent; I want to get a prototype made and have my idea sent to companies for possible licensing. They will be more than happy to do all those things… for a fee. It is not their job to tell you your idea stinks. They are providing the service you requested. They want to provide you with the services you said you wanted… for a fee.

Think of it this way. If a company that cuts grass as a service was working across the street from your house and you went over to them and said “Can you cut my grass?” They are most likely going to say “Yes, we can do that for X amount of money.” If you say I want you to cut my grass every week whether it needs it or not. They will set you up on a schedule and cut your grass every week whether it needs it or not. Because, you are the paying customer and you are asking them to provide you with their service. They also know that if you are determined to get your grass cut every week whether it needs it or not and they turn you down you will just go and find another company willing to do it every week. So, is that company a bad company for giving you what you want even when you don’t need it?

When you go to a Patent Attorney’s office and say I want you to do a patent search for me on my idea should the Patent Lawyer say “Have you gone to Google.com/patent or the patent office website yourself first to see if anything else is out there?” When you go to a design firm and say “Can you build this for me out of titanium?” Do you expect them to say “What are your plans for this? Have you looked to see if anything else is out there like this?”

When you go to a manufacturer with your designed product and say ” I want you to make me 5,000 of these in red and blue”. Do you expect them to say “We won’t make these for you until you can prove to us that these will be marketable and you will make your money back on them?”

If that is what you expect to happen you will be severely disappointed because the chances of that happening are slim to none. Why? Because they are in business to make money and they are selling you a service and you are asking them to perform a service. Whether you feel it is morally wrong on their part to do as you ask, even if they know you are wasting your money. It is not illegal for them to provide you the service. It is your job to do your research up front and to be as informed as possible to make sure you are making a sound decision.

Don’t get me wrong I feel horrible for anyone that loses their shirt and goes severely in debt, gets ripped off or just has bad luck with a product that is a great idea. I am trying to make sure you know up front what you are getting into and make you ask the hard questions to determine if you need these services. As I have said before I have several items on the market that I spent less than $100 on and never set foot in a patent lawyer’s office, or hired a design firm, or contacted a manufacturer to build me X amount of prototypes. So, it can be done.

When you come up with an idea that you think is great. You need to stop and do this exercise before you approach any company and ask for any services. Take off your Inventors cap and put on your Consumers cap. You can’t think of your idea as YOUR idea anymore. You have to think of it as something you see on the store shelf when you go shopping and are spending YOUR hard earned money to purchase it. I can’t emphasize this enough. You need to REALLY look at your idea from the consumer’s point of view and ask these questions.

• Would I REALLY buy this item if I saw it in the store?

• Why would I buy it?

• Would people that bought one buy another later? Is your idea a one-time purchase?

• Is this an item that more than just your family and friends would buy because they like/love you?

• Which companies do you think would sell this type of item?

• Are there any items like yours on the market? If yes, how is yours better and why would it sell better than theirs? Are theirs selling at all or just taking up shelf space?

• Will the consumer GET your product when they see it on the shelf without the advantage of having a commercial built around it?

These are simple questions YOU can answer without paying a soul. If you get more negative answers to these questions than positives you need to reevaluate your idea.

As an Inventor you do have rights when it comes to working with an invention submission company. Many people get ripped off because they don’t know the right questions to ask or what the invention submission company is required by federal law to tell you before you sign on the dotted line with them. If they are unwilling to answers the questions required by law, that should be a huge red flag to you; run and get away from them as fast as possible with your wallet still intact. If they are legitimate they have nothing to hide and should be happy to show you their successes and failures. Many have their successes posted on their website for you to check out.

The American Inventors Protection Act of 1999 is there for your protection. Use it. Companies that fall under this act are required to tell you the information below BEFORE you sign a contract becoming a client, not AFTER you have already spent the money!

Below is a portion of the act and its list of rights you have. READ IT! This is for YOUR protection!

Note: This is what was current as of this printing. You may need to look up a current version which can be found online easily. This is just a portion of the law that I have posted. As I stated you can find the full law online. I thought this section would give you a good basis to start with and you could look up the entire current law.

American Inventors Protection Act of 1999

TITLE IV-INVENTOR PROTECTION

SEC. 4001. SHORT TITLE.

This title may be cited as the American Inventors Protection Act of 1999′.

Subtitle A-Inventors’ Rights

SEC. 4101. SHORT TITLE.

This subtitle may be cited as the Inventors’ Rights Act of 1999′.

SEC. 4102. INTEGRITY IN INVENTION PROMOTION SERVICES.

(a) IN GENERAL- Chapter 29 of title 35, United States Code, is amended by adding at the end the following new section:

Sec. 297. Improper and deceptive invention promotion

(a) IN GENERAL- An invention promoter shall have a duty to disclose the following information to a customer in writing, prior to entering into a contract for invention promotion services:

(1) the total number of inventions evaluated by the invention promoter for commercial potential in the past 5 years, as well as the number of those inventions that received positive evaluations, and the number of those inventions that received negative evaluations;

(2) the total number of customers who have contracted with the invention promoter in the past 5 years, not including customers who have purchased trade show services, research, advertising, or other non-marketing services from the invention promoter, or who have defaulted in their payment to the invention promoter;

(3) the total number of customers known by the invention promoter to have received a net financial profit as a direct result of the invention promotion services provided by such invention promoter;

‘(4) the total number of customers known by the invention promoter to have received license agreements for their inventions as a direct result of the invention promotion services provided by such invention promoter; and

(5) the names and addresses of all previous invention promotion companies with which the invention promoter or its officers have collectively or individually been affiliated in the previous 10 years.

(b) CIVIL ACTION- (1) Any customer who enters into a contract with an invention promoter and who is found by a court to have been injured by any material false or fraudulent statement or representation, or any omission of material fact, by that invention promoter (or any agent, employee, director, officer, partner, or independent contractor of such invention promoter), or by the failure of that invention promoter to disclose such information as required under subsection (a), may recover in a civil action against the invention promoter (or the officers, directors, or partners of such invention promoter), in addition to reasonable costs and attorneys’ fees-

(A) the amount of actual damages incurred by the customer; or

(B) at the election of the customer at any time before final judgment is rendered, statutory damages in a sum of not more than $5,000, as the court considers just.

(2) Notwithstanding paragraph (1), in a case where the customer sustains the burden of proof, and the court finds, that the invention promoter intentionally misrepresented or omitted a material fact to such customer, or willfully failed to disclose such information as required under subsection (a), with the purpose of deceiving that customer, the court may increase damages to not more than three times the amount awarded, taking into account past complaints made against the invention promoter that resulted in regulatory sanctions or other corrective actions based on those records compiled by the Commissioner of Patents under subsection (d).

(c) DEFINITIONS- For purposes of this section-

(1) a ‘contract for invention promotion services’ means a contract by which an invention promoter undertakes invention promotion services for a customer;

(2) a ‘customer’ is any individual who enters into a contract with an invention promoter for invention promotion services;

(3) the term ‘invention promoter’ means any person, firm, partnership, corporation, or other entity who offers to perform or performs invention promotion services for, or on behalf of, a customer, and who holds itself out through advertising in any mass media as providing such services, but does not include-

(A) any department or agency of the Federal Government or of a State or local government;

(B) any nonprofit, charitable, scientific, or educational organization, qualified under applicable State law or described under section 170(b) (1) (A) of the Internal Revenue Code of 1986;

(C) any person or entity involved in the evaluation to determine commercial potential of, or offering to license or sell, a utility patent or a previously filed non-provisional utility patent application;

(D) any party participating in a transaction involving the sale of the stock or assets of a business; or

(E) any party who directly engages in the business of retail sales of products or the distribution of products; and

(4) the term ‘invention promotion services’ means the procurement or attempted procurement for a customer of a firm, corporation, or other entity to develop and market products or services that include the invention of the customer.

(d) RECORDS OF COMPLAINTS-

(1) RELEASE OF COMPLAINTS- The Commissioner of Patents shall make all complaints received by the Patent and Trademark Office involving invention promoters publicly available, together with any response of the invention promoters. The Commissioner of Patents shall notify the invention promoter of a complaint and provide a reasonable opportunity to reply prior to making such complaint publicly available.

(2) REQUEST FOR COMPLAINTS- The Commissioner of Patents may request complaints relating to invention promotion services from any Federal or State agency and include such complaints in the records maintained under paragraph (1), together with any response of the invention promoters.’.

(b) CONFORMING AMENDMENT- The table of sections at the beginning of chapter 29 of title 35, United States Code, is amended by adding at the end the following new item:

297. Improper and deceptive invention promotion.’.

Let me again be clear that it is the responsibility of the Inventor to check out a company before you use them. As I have said there are a lot of good legitimate invention submission companies, Design companies and patent lawyers out there. You just need to be very careful and thorough when you pick one, decide whether you need their services and understand what you get for your money. The odds are high that you might get burned if you just go in with your eyes closed and your wallet wide open.